UK borrowing costs have hit a fresh 19-year high amid a renewed bond market rout sparked by global inflation fears and signs that Labour plans to continue its welfare splurge.

UK gilt yields hit 5.89%, the highest since 1998, as the government pays record borrowing costs at a September 2026 bond sale worth up to £5

Government borrowing costs globally have surged in recent weeks amid fears over persistent inflation from the impact of the Iran war.